Posts Tagged ‘opel magna’

Former GM engineer Frank Weber helped guide development of both the Chevy Volt and its near-twin, the Opel Ampera, shown here.

Again battling speculation about the possible sale of Opel, which has been circulating in the German press, General Motors has dropped its usual policy of not commenting on speculative stories by firmly stating the long-troubled subsidiary is not for sale.

GM came close to selling off a majority stake in Opel two years ago, and many observers, especially in Germany, believe that with Opel’s recovery still stalled GM might be once again looking for a buyer. The long-running rumors gained momentum when Volkswagen chief executive officer Martin Winterkorn. Winterkorn last week suggested GM was trying to sell Opel.

Opel reveals the newest Corsa -- which could come to the U.S., according to a senior Opel exec..

It’s one of the best-known nameplates in Europe, but few Americans know the “blitz,” the lightning-strike logo of German-based Opel. But that could be about to change, says a senior executive with the General Motors subsidiary.

The brand’s chief counsel apparently sees an opportunity to sell Opel’s fuel efficient small cars to increasingly mileage-sensitive American motorists. The move could help the struggling Opel overcoming a decade’s worth of financial problems – and prevent the rumored GM plan to sell off the floundering marque.

There’s just one problem, industry analysts warn: at the current exchange rate, the dollar is worth less than 0.7 Euros, which makes it extremely difficult to turn a profit importing luxury cars from Europe, never mind econoboxes like the Opel Corsa.

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“The brand had a good reputation in the United States,” Opel Chief Counsel Klaus Franz told the Stuttgart-based Auto Motor und Sport.

He said a study is already underway and that the new model could come to the States by 2013 under the nameplates Junior or Allegra.

With Astra production to move elsewhere, troubled Opel is closing its plant in Antwerp.

At least 8,300 jobs will be cut and an assembly plant in Antwerp, Belgium closed, as part of a broad restructuring by General Motors’ troubled Opel subsidiary.

It had previously been reported that the company was considering the shutdown of two plants and at least 10,000 job cuts, so further moves could be in store as the German-based Opel takes aim at an underutilized manufacturing base and a bloated cost structure.

“Opel has to reduce its production capacity by 20%,” said Nick Reilly, Opel’s new CEO. The job cuts and closure, he added, reflect “the tough reality of the current economic environment.”

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While some parts of Europe have been showing financial momentum, in recent months, much of the Continent’s southern tier, countries including Spain, Italy and Greece, are economic basket cases, and that’s translating into a perilously weak automotive market.

Reilly estimated 2010 European car sales would decline 1.5 million units compared to 2009 and would tally 4 million fewer than 2007.

But even without these problems, Opel has been struggling for a number of years and wouldn’t have survived without a bridge loan from the German government, last year. In turn, Berlin pressed GM to sell a majority stake in the subsidiary before it would offer additional aid. A deal with the Canadian mega-supplier Magna International fell through, late in 2009, when the new GM board decided Opel was too valuable an asset to relinquish. The U.S. maker is now seeking alternative aid from European governments and pushing through a massive restructuring.

The need to trim production has been a given, for Opel, for more than a year, and the Antwerp facility was given little chance of survival considering it had been scheduled to lose production of the Astra, one of Opel’s mainstays. The Belgian government had offered more than $700 million in aid to GM, hoping to stave off closure, but the bid was rejected.

Despite some recent successes, with products like the new Insignia, Opel will cut capacity by up to 25%.

While it is “still finalizing” details of a turnaround plan for its troubled European subsidiary, Opel, General Motors expects to reduce its capacity by as much as 25%, a senior official revealed today, which would likely lead to a massive cut in jobs.

Earlier this month, GM reversed plans to sell a majority stake in Opel, which not only provides product for much of the company’s overseas dealers, but also serves as a major global product development center for brands like Chevrolet.

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The unexpected move has kicked off worker protests and rage among German politicians, who had brokered a proposed deal between GM and the Canadian auto supplier Magna International. It has also generated concerns that Opel would be targeted for big cuts in an effort to staunch multi-billion-dollar losses.

That is an eventuality that Nick Reilly, Adam Opel GmbH’s acting CEO, confirmed in a corporate blog entry, today. “What is clear is this: Opel/Vauxhall must reduce its capacity across Europe by somewhere between 20 and 25 percent,” said Reilly, who also serves as head of GM’s international operations.

The pronouncement was no surprise, nor was Reilly’s comment that, “We are still finalizing the details on the plan.” He and other GM officials are set to meet with representatives of Opel’s European unions, next week, and it is likely the automaker will press to get back the concessions workers withdrew after the sale to Magna collapsed.

Meanwhile, the company will face off with government officials representing the five European countries where Opel has plants. Enraged politicians, in Berlin, not only withdrew an offer to aid the new owners, had the sale gone through, but demanded GM immediately pay back a $3.7 billion bridge loan that had kept Opel out of bankruptcy.

Whether the Germans will now weigh back in is unclear, but representatives from Britain and several other countries have expressed interest in offering their own incentives, which could impact where the future cuts in employment occur. It has been widely expected that at least 10,000 Opel jobs – equal to 20% of the workforce – will be eliminated. Under the Magna deal, a disproportionate share of cuts would have taken place outside Germany, even though that country’s factories were considered among Opel’s least efficient.

British-born Reilly will temporarily fill in as Opel CEO while GM looks for a permanent replacement for former boss Carl-Peter Forster.

Globe-trotting British auto executive Nick Reilly, who has been running General Motors’ big Asian operations, is relocating halfway around the world – for now, anyway, as the temporary CEO of the maker’s troubled Opel unit.

The German-based Opel is in the midst of turmoil surrounding GM’s decision to back out of its planned sale to a Canadian-Russian consortium led by the giant auto supplier Magna International. The proposed deal, which had been forcefully backed by the German government, would have left GM a minority player, and was seen as a challenge to using Opel as a global product development center.

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Last week, Opel’s CEO Carl-Peter Forster announced his resignation. He is expected to go to work for Jaguar-Land Rover, the British luxury marques now owned by India’s Tata Motors. That put GM into a scramble to find a new Opel boss who could manage the reverberations of the failed sale. German political leaders have raged about GM’s decision and German workers – who expected to get a 10% stake in the company after the sale – initially staged a walkout and withdrew an offer to grant Opel concessions.

The sale of a majority stake in Opel, the German-based subsidiary of General Motors, is scheduled to be completed this week, but a variety of obstacles threaten to derail the deal, notably concerns raised by Spain, Britain and Belgium over planned job cuts that seem to favor workers in Germany.

The government of Chancellor Angela Merkel brokered the deal that would transfer 55% of Opel and GM’s British subsidiary, Vauxhall to Magna International, the Canadian-based mega-supplier, and a Russian government controlled bank. GM had preferred another bidder which offered it the possibility of eventually buying back Opel, but the Berlin government – along with the powerful German union IG Metall – openly preferred Magna and its Russian ally, Sberbank, because they appeared more willing to protect jobs.

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But that has become the source of the ongoing trouble. The number of likely jobs that will be cut as part of the Opel restructuring has now risen to 10,500. But there is concern that a disproportionate share of the job losses – 6,500 in all – will occur outside Germany, even though some of the plants that will be impacted are among Opel’s most efficient.

A new car for an almost-new company, the 2010 Opel Astra, will go on sale in late 2009.

Think of the 2010 Opel Astra as a new car for a new company. Well, almost, but the German maker’s 10th-generation compact car will make its debut just as General Motors sells off a controlling stake in its once-formidable European subsidiary,

The sale, which will transfer a 65% stake in Opel to the Canadian supplier, Magna, and Opel’s union workers, dominated the maker’s news conference at the 2009 Frankfurt Motor Show, but for those who looked a little closer, there was other news to be found at the Frankfurt Messe.

The Astra would be a critical product, no matter who owned Opel, considering the compact line accounts for a third of the German maker’s sales volume. Opel is betting that the updated hatchback, shown in Frankfurt, will help pull the company out of its worsening financial situation.

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Like a number of other new models debuting in Frankfurt, Opel designers opted for a coupe-like roofline for the hatchback Astra. It gives the vehicle both a more dynamic, and more sensual appearance, and adds a family resemblance to Opel’s new, top-line model, the Insignia.

"A milestone," says Opel CEO Carl-Peter Forster (head lowered) of the sale of a controlling stake in the company to a consortium lead by parts supplier Magna. But there's growing opposition to the deal.

The newly-reconstituted Opel is getting off to a shaky start, even before General Motors and its new partners have completed their deal to share control of the struggling German automaker.

The deal will go through, said senior officials from both GM and Magna International, the Canadian supplier that led the acquisition of a majority stake in Opel. But trouble could be facing the new partners on several fronts.

For one thing, European Union officials may challenge the deal, which was completed under heavy pressure from the German government, and even Opel’s labor unions, which will receive a 10% stake in the former GM subsidiary, are warning of a possible “action” to pressure Opel not to close plants or trim it’s workforce.

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Facing the threat of bankruptcy in Europe, GM announced, earlier this year, that it would sell a stake in Opel, in return for a German government bailout. Negotiations dragged on until last week, as it became clear that the U.S. maker was looking for an alternative bidder who might eventually allow GM to regain control of Opel. But last week, GM gave into pressure from Berlin, agreeing to sell a controlling stake in it’s troubled European operations to Magna and it’s Russian backer, Sberbank.